Questions of Cash: October 2015

Q. I had a plumbing emergency in September and phoned London Emergency Plumbing.  A plumber came an hour and 40 minutes later and did little more than turn off a valve to the storage tank in the loft and turn back on the mains supply. The following day I had £678 charged to my credit card, without having been emailed an invoice or job report as promised. Three phone calls, one email and one letter to the company in the following weeks have made no difference.  My credit card company – Barclaycard – say they can’t do anything about it. I have contacted Bedford Trading Standards, who are well aware of this business’s practices.  MS, St Albans.

A. Not only is Bedford Trading Standards well aware of this business, so are we.  This column has previously reported on the business variously known as London Emergency Plumbing, London Emergency Plumbers and Express Plumbing – see Questions of Cash 13 March 2015, 12 July 2014 and 17 May 2013.  On two occasions, readers were charged more than a thousand pounds for short night-time calls, where little work was done.  In the third instance, a reader was charged £132 for booking a call and then cancelling it soon after.  We believe that your billed charge of £678 is excessive and we explained that to Barclaycard.  It has agreed to make a partial refund, so that you only pay the agreed call-out charge of £210, including VAT.  A spokeswoman for Barclaycard says: “We have investigated this case under both ‘chargeback rules’ and Section 75 of the Consumer Credit Act 1974 and have made the decision to make a refund of £468.00, which [the reader] is happy with. Under the above Act, we feel from our investigations that [the reader] was misrepresented regarding the charges taken by London Emergency Plumbing.  We have made representations through Visa regulations to reclaim the overcharge from the merchant.”  We contacted London Emergency Plumbing, which defended its charges.  Its call operative – who declined to give his name – said: “A customer is always quoted a call-out charge as part of our booking procedure, plus our half hour rate, which is £149 at three in the morning.  We provide a 24 hour emergency service, using qualified engineers.  Obviously this service comes at a cost.  All our calls are recorded, the customer signs the job sheet, which confirms the rate, at the end of the job and on arrival, so it is not possible to charge one price and quote another.”

In December 2013 Bedford Borough Council took to court Mohammed Shamrez, who traded at the time as Express Plumbing and London Emergency Plumbers.  In a statement after the case the council said: “A rogue trader, whose behaviour was described as ‘insidious’  and  ‘amongst the worst of its kind’ has been issued with a Court Order and been told to pay over £16,000 in legal costs….. the Court heard how Trading Standards Officers had received a multitude of complaints about Mr Shamrez.”  The court issued an enforcement order which prohibits Mr Shamrez from overcharging for work, prolonging time spent at customers’ homes to increase charges, processing payments without customers’ knowledge, adding additional charges and misleading customers on the extent of work required. We strongly suggest readers avoid this business.

Q. I retired in 2000. Whilst employed, and over a period of many years starting in the 1980s, I obtained shares in my employer BAE Systems through a variety of share schemes and annual bonuses paid in shares. The share schemes allowed me to acquire the shares at an advantageous price. I have always taken dividend payments as additional shares (scrip or stock dividend) rather than as cash. I presently own in excess of 7,000 shares.  I am contemplating selling my shares. The manner in which I obtained the shares makes it impossible for me to determine the exact gain on each share. However, the current price of all shares exceeds the purchase price and I am confident that the current price for a substantial number of shares will be between £2 and £3 above their purchase price.  If I were to sell my entire holding, I would exceed the Capital Gains Tax annual exemption (currently £11,100 for the 2015/16 tax year). Since this gain is spread over about 30 years, would I still be subject to CGT?  EU, by email.

A. Gill Smith at accountancy firm Moore Stephens responds: “The Capital Gains Tax system for individuals no longer makes any allowance for the length of time over which a gain has accrued. Prior to 6 April 2008 individuals could benefit from indexation allowance, which adjusted the cost of assets for inflation, but since that date the capital gain is simply the difference between disposal proceeds and cost. Where, as in this case, the capital gain exceeds the CGT annual exemption then CGT would be payable if the entire holding were to be sold in one tax year.  If the disposal of the shares was spread over two (or more) tax years then two (or more) CGT annual exemptions could be utilised. Taxpayers who are married or in civil partnerships can also transfer assets to each other.  The recipient spouse takes over the donor’s cost history.  This can be a means of increasing the number of CGT annual exemptions available.  Care should be taken in situations where the cost of shares obtained in your employer company is not readily available. Depending on the exact nature of the share scheme or bonus arrangements under which the shares were acquired an adjustment may have been processed through the payroll and there may be a deemed cost for CGT purposes.  In some cases the former employer may be able to provide details of historic share and bonus schemes, but in other cases the only alternative to seeking professional advice may be to take a prudent view and assume that the shares have zero cost and sell up to the value of the annual exemption over a period of years.”

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